Question

Which of the following is an example of a non-tariff barrier to trade?

• A. A quota on the number of goods that can enter a country
• B. National product safety standards
• C. A tax levied on imported goods
• D. All of the above

Answer 1

The correct option is B National product safety standards

Tariffs are taxes that governments levy on imports of goods in order to protect domestic producers and raise revenues for the government. Sometimes tariffs are accompanied by quotas, which set import limits. Sometimes governments are able to restrict trade and protect domestic producers without the use of tariffs. National product safety standards are an example of a non-tariff barrier to trade. For example, by setting national safety standards, a country can effectively bar foreign producers from selling their goods in the country unless they make modifications for that specific national market-usually too costly for a manufacturer to undertake. Non-tariff barriers to trade proliferated during the economic downturn in the 1970s, as national governments sought to protect their domestic producers.